By Carrie Selin

Editor’s note: Carrie Selin is Manager of Taste Alberta, representing organizations within Alberta that have come together to encourage loyalty to local foods. She can be contacted at carrie.selin@tastealberta.ca.

By now, almost everyone in the Canadian agri-food industry has experienced some form of minor or major disruption to a meeting, conference or event that had been previously scheduled to take place in-person, prior to COVID-19.

With the easing of public health restrictions across the country, many people are breathing a little easier these days and looking forward to the continued interpersonal interactions that were missed in the past year or longer. Getting back to regularly planned activities, as before the pandemic, has become a priority for enhancing industry effectiveness and improving workplace pride and satisfaction.

Producer get-togethers stifled

The Canadian agri-food value chain begins with producers, and COVID-19 has had a range of unexpected impacts on how business has been conducted. Sometimes, the impact was relatively minor, such as a few more phone calls or an exchange of emails instead of meeting for coffee. For others, the impact was a little more painful, forcing a change in habit from normal gathering settings to a completely virtual arrangement – something that even the most tech-savvy among us can struggle with. 

“When COVID-19 restrictions were originally put into place in Alberta last year, it was the very day after our last face-to-face meeting with producers,” said Brent Moen, Chair, Alberta Pork. “Little did we know then it would take this long, but we are excited to get back to in-person meetings, hopefully within the coming months.”

The meeting referenced by Moen – one of four hosted by Alberta Pork across the province – touched on many hot-button issues that were burning then and are still smouldering today. Often, when it comes to addressing important business, something is lost when that process moves out of the hotel conference room and into the Zoom meeting room.

However, feedback from producers on subsequent virtual meetings – such as Alberta Pork’s annual general meeting (AGM) in November 2020 and following the round of semi-annual meetings in March 2021 – suggests that, while producers almost unanimously prefer in-person get-togethers, the virtual platform can be useful when needed. In lieu of an ability to gather in-person, remote meetings have been an adequate replacement and have even offered some benefit when it comes to limiting unnecessary travel and making those meetings more easily accessible to producers who struggle to balance their farm workload with taking time to attend a meeting in town.

More broadly, larger, internationally recognized events like the half-century-old Banff Pork Seminar were hit by restrictions in more ways than one. The Banff Pork Seminar is known as a premier event within the North American and global swine industry, attracting hundreds of attendees every year. However, in addition to the excellent programming offered, there is simply no way to digitally replicate the splendor of the Canadian Rockies. In 2020, the Banff Pork Seminar attracted upwards of 800 guests, which was matched in 2021, albeit with much less fanfare.

“We look forward to hopefully seeing everyone in-person in beautiful Banff for our delayed 50^th anniversary celebration,” said Ashley Steeple, Conference Coordinator, Banff Pork Seminar. “The 2021 edition of the Seminar presented many challenges, and while we were able to climb over that hurdle in the end, we would much prefer a return to what everyone knows and loves!”

Originally, the Banff Pork Seminar organizing committee had considered extended opportunities as part of a 50^th anniversary celebration, including a banquet, with a meal served by the legendary kitchen at the Fairmont Banff Springs Hotel. This celebration was wisely though grudgingly postponed, as attempting a virtual equivalent would have been a major injustice to fully appreciating the quality of the food at the Banff Springs, in addition to the life-long memories that are forged in that kind of intimate setting.

While the virtual world has presented us with many unique solutions to COVID-related problems, some things, such as celebrations, are too substantial to re-create.

Public engagement efforts transitioned

COVID-19’s impacts on food processing have been well-documented, but further down the value chain, the successful execution of food-related marketing activities has continued to bolster farming communities by encouraging support for Canadian-grown and -raised food.

In the past, consumer engagement opportunities have focused on extoling the virtues of high-quality Canadian food, with opportunities to meet a farmer or taste a local dish prepared by a talented chef. Events and festivals are an effective way to showcase where food comes from beyond the grocery store, but gathering limits have smothered some of the momentum like a wet blanket.

With that in mind, COVID-19 restrictions have meant that we need to find new ways for consumers to take in memorable experiences without being in direct contact with those offering the experiences, and this has taken shape in different ways.

“Like many other businesses in the province, we have been experimenting with solutions to continue serving our customers safely, creating the best possible experience in spite of conditions,” said Paul Shufelt, Chef & Proprietor, Workshop Eatery. “Some of those concepts have done better than others, and going forward, we are looking to leverage our lessons learned in a world that is embracing new ways of appreciating great food, during a pandemic or otherwise.”

Shufelt is a proud partner of Alberta Pork, having been involved in multiple events over the years celebrating all things piggy. In addition to his flagship restaurant, he operates two Woodshed Burgers locations in Edmonton, acts as an ambassador for the local culinary scene and has appeared on Food Network Canada’s “Fire Masters” as a contestant. Being on the cutting edge is in his nature, and like many other innovative food industry players, COVID-19 has allowed him to flex his creative muscles.

Rather than offering dining room service or hosting private functions, restaurants across the country have made the move to high-end takeout options, including full gourmet meals, along with newer concepts, such as cocktail packages. Cooking classes and demonstrations, usually reserved for public spots, have moved online, giving viewers a glimpse into processional kitchens without the hassles of finding physical space or needing to consider aspects of food safety in the service environment.

The Porkapalooza BBQ Festival is a world-class cooking competition, sanctioned by the Kansas City Barbeque Society (KCBS) – the world’s largest organization of barbeque and grilling enthusiasts. Historically, Porkapalooza has afforded groups like Taste Alberta and Alberta Pork the opportunity to collaborate and bring agri-food education to the masses. Since 2014, Porkapalooza has taken place annually in Edmonton, with the exception of 2020, when the event was stayed until May 2021, and then further moved to August 2021. In the early days of COVID-19, when it was uncertain whether restrictions would last two weeks, two months or two years, Porkapalooza’s path forward was unclear but ever-optimistic.

“We are incredibly eager to get back to hosting our competition for all the BBQ teams that invest their own time and money to take part,” said Mark Bosworth, Chair, Porkapalooza BBQ Festival Society. “Our event showcases some of the best food around, from some of the best cooks and pit masters you’ll find, which is a testament to the great work of everyone in the value chain – all the way back to the farmers who raise the products we are privileged to use.”

In 2021, Porkapalooza will look a little different, as this year’s competition is closed to the public – a difficult decision made earlier in the year, prior to the first postponement, out of an abundance of caution. In previous years, Porkapalooza came with a well-attended public festival component, including interactive tours of the cooking area, food stage demonstrations from local pros, plus plenty of family-friendly entertainment to ensure an enjoyable experience for everyone. While the festival’s valued guests will not be able to attend in-person this year, there are still plenty of opportunities to participate online, including prize contests and other event-related content shared through social media.

In years past, team attendance has pushed upwards of 50 cooking crews, mostly from Alberta and Saskatchewan, but also from as far away as British Columbia, Manitoba and Ontario. Given restrictions that were in place when the festival was first being organized, and on account of event logistics, Porkapalooza this year will host close to 30 BBQ teams to build excitement heading toward the 2022 event, which will hopefully inspire even more teams to participate, with public guests welcomed back. 

Arriving at the ‘new normal’

When it comes to telling the story of the Canadian agri-food value chain, the most authentic and resonating way to accomplish that goal is to place consumers directly into conversations with producers. And for producers, being aware and informed of industry issues around them is a necessary condition of being able to tell that story in a compelling and accurate way.

Natural opportunities to facilitate conversations between producers and consumers are presented with in-person events, generating widespread return-on-investment for the entire industry. Now more than ever, digital platforms have become critical to transmitting information, by using blogs and social media to promote content like photos and videos that try to capture a larger total experience and story.

With lockdowns and other restrictions in place to keep us safe, creating meaningful engagement has proven difficult. People have gradually become ‘Zoomed out’ with ‘COVID fatigue’ – the cultural symptom of a public health emergency, whether one falls ill or not. Most people today spend at least some of their working day behind a computer, and spending leisure time staring at a screen has become less appealing as time goes on.

If you were wary of the ‘new normal’ just as COVID-19 was starting to ramp up, the good news is that the bitter pill of change is getting somewhat easier to swallow, with the end of restrictions coming into view. As we all anticipate bigger and better things coming in the Canadian agri-food industry, COVID-19 has shown us new ways of flourishing under less-than-ideal circumstances.

By Shawn Halter & Bijon Brown

Editor’s note: Shawn Halter is Manager, Industry Development & Analysis at Sask Pork. He can be contacted at shalter@saskpork.com. Bijon Brown is the Production Economist for Alberta Pork. He can be contacted at bijon.brown@albertapork.com.

Flash back to early February: the annual polar vortex had just descended upon the prairies, shrouding much of the landscape in a blanket of extremely cold air approaching wind chills of minus-50 degrees Celsius in some cases. Just the thought of those temperatures is enough to chill any person – or animal – to the bone.

Western Canada’s millions of hogs are thankfully able to brace for those potentially lethal temperatures by using barns, heated with energy sources derived from fossil fuels. Few, if any, other practical options exist, as alternative heating systems and non-petroleum fuels are virtually unobtainable, highly cost-prohibitive or simply ineffective.

Despite this overwhelming reality, the carbon tax has hammered at pork producer profitability for several years now. Just how much? Data from the prairie provinces is being evaluated to weigh the burden on hog farmers, while other sectors have been spared much of the pain. As carbon pricing in Canada seems to have become a political inevitability of late, its existence has raised the cost of doing business, and hog barn operators – without readily available alternatives at their disposal – are left footing the bill.

The Government of Canada’s price on carbon, in principle, is designed to encourage consumers to consider the environmental degradation caused by their day-to-day carbon emissions, resulting from gasoline and diesel for transportation, natural gas and coal for power generation and heating, or even propane for firing up barbecues.

The carbon tax is intended to reduce consumption and spur investment into alternative forms of energy. But how can petroleum product use go by the wayside when these products remain vital for survival in our climate and necessary for figuratively and literally ’putting food on the table?’ At the moment, it is unfeasible.

Mapping the on-farm carbon landscape

Twenty pork producers in Alberta and seven in Saskatchewan were recently surveyed to estimate the impact of the carbon tax on their farms. The survey asked producers with metered barns to share the usage for electricity and heating, along with any propane usage and the distance traveled to market hogs, during the 2020 calendar year.

While there are other sources of carbon emissions that can be linked to hog production – such as feed mill operations or off-farm feed purchases that require pick-up or delivery – and since hog market destinations differ from one farm to the next, only the fuel cost to transport hogs to market is captured in that part of the overall estimation.

In Alberta, usage varied greatly depending on the farm type. For example, farrow-to-finish operations used substantially more heating fuel than grow-to-finish, farrow-to-wean and nursery operations. On the other hand, farrow-to-wean operations used considerably more electricity than the other previously noted types.

Breaking down carbon tax costs for hog farmers

When comparing Alberta and Saskatchewan, separate coefficients are used for electricity, as the provinces’ electricity markets are different. Provincially owned SaskPower sources electricity from independent producers and then retails it to end-users, while the electricity market in Alberta consists of privately owned wholesale buyers (energy suppliers like ATCO, Enmax or Fortis) and producers of electricity interacting by bidding on the price and quantity of electricity each hour of the day. Where supply meets demand, the market clears, and the wholesale price of electricity is realized. Retailers then sell electricity to end-users, including farmers. This disparity between the provinces makes it difficult to track the carbon composition of electricity at any point in time, as successful sales to the grid may consist of electricity from fully renewable sources, fully fossil-fuel-generated sources or a blend of the two.

It is indicated from the estimates that the carbon tax on electricity in 2020 ranged between $0.19 and $0.48 per marketed hog. For natural gas, the carbon tax was between $0.38 and $0.47 per marketed hog. The carbon tax on propane was around $0.10, while the carbon tax on diesel for transport vehicles was between $0.04 and $0.12 per marketed hog.

Overall, the carbon tax for the survey respondents, on average, was between $0.79 and $1 last year. Based on data from Commodity Professionals Inc., it is estimated that producers in western Canada lost about $12 per hog in 2020, not including the carbon tax. Factoring in the carbon tax, that added expense served to drive another nail into the coffin of some operations, making them financial unviable, and even forcing some producers of varying size to go out of business.

In the coming decade, the price on carbon is expected to jump to $170 per tonne of CO₂ equivalent. If consumption patterns remain the same, then the carbon cost would jump to between $4.50 and $5.62 per marketed hog. Placed in context of the most recent cost of production study conducted by Alberta Pork for the 2019 calendar year, heating, electricity and transportation costs amounted to $7.63 per marketed hog; this represented only five per cent of operating costs. Nevertheless, producers who volunteered their information for the cost of production study experienced an average loss of $5.30 per marketed hog.

In 2030, if everything else is held constant and carbon taxes amount to $5.62 per marketed hog, then losses would balloon to almost $11 per marketed hog. That may be a tough pill to swallow for some producers, especially when, over the past five years, they have experienced double-digit losses on most hogs marketed, only now beginning to recover as prices experience a summertime boost.

Clearly, a carbon tax is not in the interest of hog farmers, nor is the impact on the hog sector proportional to other agricultural commodities, which may have fared better over the same period and into the future.

Not all commodities are treated the same

Canadian consumers value choice. Even in the dead of winter, product offerings at the retail level remain consistent, even if somewhat seasonal. This includes items like fresh produce, dry goods and meats that are imported from parts of the world with fairer climates or other production advantages.

Some carbon-intensive agricultural sectors in Canada are eligible to recuperate carbon tax expenses, but livestock producers have not yet been afforded the same luxury. In the Government of Canada’s 2021 budget, $100 million was set aside for producers to help offset rising costs due to the carbon tax. However, the details on which types of farms and activities qualify are still to be determined and can be expected this fall, according to the government.

On many farms, the current carbon tax increased costs and decreased farmers’ ability to be more productive and proactive by bringing more jobs to rural communities. On top of the current pain, this tax is set to increase five-fold over the next decade, exacerbating the problem.  

When it comes to imported goods, such products are not subject to the same standard of taxation, despite the comparatively large carbon footprint associated with international trade. And because no carbon tax is levied against these imported products, Canadian farmers are invariably harmed in the process, while foreign exporters are not. Easily overlooked by the consumer, not so easily overcome by the domestic producer.

And, still, a much bigger question remains: how does any part of this situation promote lower carbon emissions? Essentially, for livestock producers, it does not.

While taxation appears to be a punitive measure against producers, some incentives do exist on the provincial level to encourage reduced fossil fuel consumption, such as carbon credits and other funding for projects that seek to reduce carbon intensity. Federally, a recent proposal to offer a credit-based program is also taking shape, but some farm groups, such as the Ontario Federation of Agriculture (OFA), worry that criteria for such a program may not recognize much of the progress that has already been made.

“Farmers have been doing a lot of good environmental work for a number of years. This didn’t just happen overnight,” said Drew Spoelstra, Vice President, OFA. “We’ve been doing things like following no-tilling and best management practices for a generation almost.”

Any solutions that may be forthcoming are desperately needed – and needed promptly – for the sustainability of many farm businesses and to defend food security for Canadians.

Political support could be on the horizon

In February 2020, Phillip Lawrence, Member of Parliament for Northumberland-Peterborough South (Ontario), introduced Bill C-206 in the House of Commons, an amendment to the Greenhouse Gas Pollution Pricing Act, which would extend the existing carbon tax exemption on farm gasoline and diesel to include natural gas and propane. The bill passed third reading and adoption in June 2021.

“Our farmers are struggling out there. They are now facing multiple blockades in addition to pricing instability and trade disruptions. The pressures on our farmers today are innumerable,” said Lawrence. “One of the things I heard when I was travelling my riding, from farmers and non-farmers, is that the carbon tax is impacting the way they operate their businesses. In fact, the carbon tax is taking away up to 12 per cent of their net income, so this is having a significant impact.”

Canada’s provincial and national pork producer organizations have previously called upon the Government of Canada to create a carbon tax exemption. Shortly following the introduction of Bill C-206, Rick Bergmann, Chair, Canadian Pork Council (CPC) sent a letter to Marie-Claude Bibeau, Minister, Agriculture and Agri-Food Canada (AAFC) urging her government’s support for such an exemption, citing economic impact studies generated by Manitoba Pork in 2019.

“To efficiently produce pork and manage the welfare of their animals, pork producers use natural gas or propane to heat their barns. There are no other practical alternatives,” the letter reads. “It is projected that, by 2022, fuel costs will increase by 150 per cent and cost pork producers $10 million per year. The carbon tax costs faced by producers cannot be recouped from the marketplace, as we face daily competition from American pork imports.”

In addition to alleviating the pain caused by the carbon tax, governments at all levels must consider their role in establishing the relevant legal framework to facilitate the development and expansion of infrastructure for the adoption of low- or no-carbon technologies. Such investment should also prioritize research and development of alternative energy, providing a clear pathway for making a smooth transition. Canada is a leader in innovation, but our privileged position depends on governments to play a large supporting role by attracting private investment, paving the way for economic growth.

Canadian power supply composition is changing, albeit slowly

If Canadians are permanently saddled with a price on carbon – which appears increasingly likely as time goes on – what kinds of solutions are available? Most directly and obviously, innovation in the area of power supply composition.

Canadian provinces have largely built their energy infrastructure around the natural resources available. This means that, with Niagara Falls in Ontario, hydroelectricity factors greatly in energy consumption, while in the prairie provinces, which are endowed with fossil fuels, carbon-emitting energy is featured disproportionately more.

There have been considerable strides to shift the carbon composition of electricity generation. In Saskatchewan, the composition of the electricity grid declined from 84 per cent coal and natural gas in 2018 to 72 per cent in 2020. In Alberta, the carbon-intensive share declined from 92 per cent in 2018 to 81 per cent in 2020.

There has been little change in the heating and transportation fuels over the same period. This may be partly due to infrastructural and regulatory policies that fail to facilitate meaningful change. Many farms have already made the transition from coal boilers for heating to natural gas and blended fuels with ethanol or biodiesel under policies that preceded carbon pricing.

One of the potentially viable alternatives that is becoming more and more popular is hydrogen. Hydrogen can be used for electricity, heating and as a transportation fuel. It can be produced using natural gas or renewable electricity. The major constraint to making considerable change is the lack of infrastructure support. In April 2021, the Edmonton region was identified as Canada’s first hydrogen hub. This new approach is expected to help to bring down the price of hydrogen by developing infrastructure to expand the use of hydrogen as fuel. While this recent shift away from fossil fuel over-reliance should be praised, it seems as if the cart was put before the horse. For any alternative to be fully useful, infrastructure must be widely developed and implemented prior to the use of carbon pricing as an incentive to transition to the cleaner alternative. Currently, pipeline and service station infrastructure are some of the greatest challenges to seeing hydrogen adopted in the mainstream.

Significant investment will no doubt be required to either bypass or replace existing natural gas infrastructure. In the U.K., as an example, the cost for getting all homes hydrogen-ready is estimated to be around £140 billion (or CAD $240 billion). Clearly, if the cost is so much to cover a land mass the size of the U.K., it may be significantly more for Canada. Such an investment would require both public and private partnerships, as well as clear transition targets. For instance, the U.K. is working towards having all boilers sold for home heating to be hydrogen-ready. Many home boilers currently operate on natural gas, but with changes to a few parts, by 2025, units can run entirely on hydrogen while costing no more than £100 (or CAD $170) to upgrade. Such a model sets a precedent for how to possibly handle a workable transition from natural gas to hydrogen.

In addition to power generation, the transportation industry must also be cast into the spotlight as the largest contributor, proportionally, to total carbon emissions. Within this industry, heavy-duty freight is the second-largest carbon emitting sector in the world, yet carbon-free alternatives are not scheduled to come online until after 2024. Furthermore, the cost of such trucks is predicted to be around USD $250,000 (or CAD $300,000), which would certainly be outside the range of affordability for most hog farmers in Canada.

Placing a price on carbon without providing clear leadership or opportunities to make the transition to alternatives effectively places a tax on productivity and creates a competitive disadvantage for Canadian hog farmers. Foreign suppliers in the pork sector and elsewhere in agri-food have recognized our impediment and exploited it, as a result.

The European Union (E.U.) will, by the end of 2021, institute a carbon border adjustment mechanism to address loss of competitiveness due to carbon pricing. The mechanism will adjust the price of all E.U. imports for the carbon emitted in its production process, thereby leveling the domestic playing field. Canada has yet to propose something similar, but such a mechanism is essential to have in place before carbon pricing. Unlike the E.U., the Government of Canada’s decision not to be prudent in this area will negatively impact Canadian production in our own domestic market.

However, Canada is a net exporter of many commodities, including hogs and pork. This means that, while something like a carbon border adjustment mechanism would strike a better balance between foreign and domestic products in Canada, it will do little to improve our standing in the international marketplace. That is bad news for pork producers. What is needed is a review of agreements like the Canada-United States-Mexico Agreement (CUSMA), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Comprehensive Economic and Trade Agreement (CETA) to ensure that any carbon border adjustment mechanism offers a fair deal for Canada in North American, European and Asian markets.

The future of fossil fuels in farming

For fossil fuel alternatives to be taken seriously, no individual industry – and certainly not agriculture – should be singled out and demonized. Even the most die-hard environmental advocate likely does not hunt and forage for his or her own food, which almost definitely arrived through means that are reliant on fossil fuels.

Canada’s carbon tax is not a credible, effective or fair initiative to lead positive change, but it is one of many tools that could be used to drive the transition to greener alternatives. Emphasis ought to be placed on bringing alternatives online as soon as possible for the sake of availability and affordability.

Across the world, in virtually every industry, the push to reduce fossil fuel consumption seems to have been a driving force for not only environmental policy but also political and social change. At this point, the discussion is inescapable, and as time goes on, the calls to ‘go green’ will likely only continue.

For the agriculture industry, there is a great deal of opportunity to innovate and institute new best practices that not only welcome this shift in thinking but also showcase Canada’s leadership in this regard. But this transition can only take place if producers are free of the burden that additional costs –such as the carbon tax – place on investment.

Carbon pricing seems to be here to stay, and our industry needs to continue to adapt as it has always done. With appropriate and swift government support through proactive regulations and programs that attractively promote the transition to cleaner sources of energy, the industry can potentially weather the carbon pricing storm. In the meantime, farmers may have to wait a little longer, hoping for improvements that enhance their ability to operate in an ecologically responsible but also financially sustainable way.